Uruguay, here represented by capital Montevideo and its World Trade Center, is the only full democarcy in Latin America, according to a new EIU index. ( Photo: Alvaro Mouriño)

Wednesday, January 27, 2016

Special Reports

Democracy Index: Argentina, Guatemala Improve

Uruguay scores better than the United States, South Korea and Japan.

BY JOACHIM BAMRUD

Argentina and Guatemala were among the countries that improved their rankings on the Democracy Index from the Economist Intelligence Unit (EIU).

“Argentina and Guatemala are noteworthy since their increase partly reflects our more positive view of their respective democracies,” says Rodrigo Aguilera, Latin America Analyst at EIU. “In Guatemala's case, because of the smooth transition following Otto Pérez Molina's resignation and the election of Jimmy Morales. In Argentina's case, because of Mauricio Macri's victory which put an end to over a decade of Kirchnerismo. These examples show that in some cases, political crises can actually lead to better outcomes although of course, it is too early to tell whether Morales and Macri will live up to their promises.”

Other countries that increased in the rankings were Panama, Trinidad and Tobago, theDominican Republic and El Salvador.

Meanwhile, four countries fell in the ranking: Brazil, Mexico, Ecuador and Honduras.

“Brazil's decline this year owes to the corruption scandal engulfing the government of Dilma Rousseff and the resulting impeachment proceedings against her; a perfect political storm that has soured sentiment in democracy,” Aguilera says. “Mexico is still feeling the fallout from the Ayotzinapa kidnappings and Casa Blanca conflict of interest scandal in 2014 but also from revelations of institutional shortcomings from various internationally-sponsored investigations (on torture and Ayotzinapa).”

Uruguay became the lone “full democracy” in Latin America after Costa Rica saw a slight deterioration and now ranks as a “flawed democracy.”

Uruguay ranks 19th globally, ahead of 20th- ranked United States thanks to beating the United States on such factors as electoral process and pluralism, functioning of governmentand civil liberties (although it trailed the United States when it comes to political participation and political culture).

Uruguay’s score is also higher than countries like South Korea and Japan.

Meanwhile, Costa Rica ranks 23rd globally, ahead of countries like Belgium and France, while Chile (third in Latin America after Uruguay and Costa Rica) ranks ahead of nations like Taiwan and Portugal.

The two worst countries are Cuba and Haiti, followed by Venezuela. Cuba and Haiti are ranked as “authoritarian” while Venezuela ranks as a “hybrid regime.”

The average regional score for Latin America remained largely unchanged in 2015 compared with 2014, and the region’s best and worst performers remained in the same positions. Latin America’s average score of 6.4 is higher than the world average of 5.6. By region, Latin America ranks only behind North America and Western Europe in its score.

ARGENTINA

Argentina’s improvement was largely because of the election victory of opposition candidate Macri in the presidential elections.

“Argentina's score improved in the 2015 democracy index, mostly reflecting the victory of a presidential candidate from outside the country's two dominant political parties last year, suggesting the path to power for such parties, while difficult, is not impossible,” says Fiona Mackie, Regional Manager and analyst for Argentina at the EIU. “Further improvements in the coming year will be more difficult, as these will require reforms to institutions to help improve the functioning of government (a category that includes concepts such as transparency, accountability, corruption, and checks and balances). Even if undertaken by the new government, such reforms will take time to bear fruit and may not be immediately apparently in the coming year.”

Macri has vowed to boost transparency and fight corruption. He is already overhauling the country’s statistics institute Indec, which from 2007 until December last year had its official data (especially on inflation) manipulated by the government. The effort is being led by GabrielaBevacqua, who was fired in 2007 as head of Indec’s inflation unit by then-President Nestor Kirchner.

Meanwhile, Macri has also vowed to fight government corruption. Argentine media have widely reported how former President Cristina Kirchner and her key aides significantly boosted their personal fortunes during their periods in power. NGO 100 Reporters ranked her as the second-most corrupt in the world. “Her declared personal wealth stands at $13.8 million, up from $500,000 when the couple first entered national politics,” 100 Reporters says.

GUATEMALA

Guatemala, Central America’s largest economy, saw a dramatic year in 2015, with a corruption scandal that eventually led to the ouster of President Otto Perez Molina after his vice president and several key aides were jailed. In September comedian Jimmy Morales won the first round in presidential elections and then widened his lead further in the second round in October.He assumed office on January 14, 2016.

“The one area where Guatemala improved in the 2015 scores was the preparedness of the population to take part in demonstrations,” says Anna Szterenfeld, Latin America analyst at EIU. “Such demonstrations contributed to the resignation of the president in 2015.”

However, given the weakness of institutions, the fragmented legislature, and other governance problems, she doesn't foresee any additional improvement in any scores in 2016 that would be sufficient to lift the country into the "flawed democracy" category.

“I don't think that the election of a new president, even if he is an "anti-corruption" crusader, will have a great impact on our scores for the democracy index,” Szterenfeld says. “Widespread institutional corruption will be very difficult to eradicate, and is likely to continue.”

On Monday, Communicantions Minister Sherry Ordoñez after her firm showed up as a government contractor, which is illegal for someone in her post, Reuters reports. Her company, which provides engineering and road services, had also been suspended for delays in tax payments, according to local media.

Guatemala will also continue to score poorly for confidence in political parties, the engagement of citizens with politics, the extent to which citizens follow political developments, and perceptions of the country's leaders, and respect for human right, she adds.

“Even though Morales got 67 percent of the vote in the run-off, this was largely a protest vote against the political establishment,” Szterenfeld says. “If he fails to deliver, he could become rapidly unpopular.”

COSTA RICA

Costa Rica's score fell only modestly as a result of a slight downgrade to its functioning of government score. However, this was enough to push the country down to "flawed democracy" status, having been one of the region's only two "full democracies" since the index was begun.

“Costa Rica is facing a significant problem of public confidence in government as a result of gridlock and a more fractured legislature,” Aguilera, says. “For voters used to the relatively centrist two-party system that dominated the second half of the 20th century, the country's new political environment does not appear conducive to cooperation. Given the gridlock seen in the first half of Luis Guillermo Solís's term, these feelings are likely to be reinforced if he does not manage to turn his political fortunes around.”